August 16, 2008 Regulators upheld a record USD$10.2 million fine against Southwest Airlines for alleged safety violations and want payment this month, the US Federal Aviation Administration said on Friday.

The FAA said in a letter to the airline and its legal counsel this week that the civil penalty "is appropriate" and would remain at the proposed amount.

The agency said it would turn the matter over to the Justice Department if payment was not received by August 29.

Southwest said the notification "was part of the process" and the company was reviewing its options. It declined to comment further.

Southwest met in April with FAA officials as part of an informal review of the fine proposed in March for alleged maintenance shortcomings.

It is common for airlines to appeal fines, and in many cases the penalty is reduced.

The FAA said Southwest had failed to inspect Boeing 737s for structural cracks and continued to fly those aircraft even after notifying the agency that it had missed a deadline to complete the work.

Southwest, the biggest US airline by market value and the healthiest financially among major carriers, said it responded appropriately to the problem and never compromised flight safety.

The FAA said there were no safety incidents related to the missed inspections.

The case was triggered by whistle-blower complaints to Congress, which put pressure on the FAA to step up safety oversight of the industry.

The FAA on Thursday proposed a USD$7.1 million fine against American Airlines for alleged safety violations and other problems.

August 27, 2008 Southwest Airlines said on Wednesday it will not comply with a US Federal Aviation Administration deadline of August 29 to pay a record USD$10.2 million fine for alleged safety violations.

The FAA said earlier this year that Southwest continued to fly uninspected aircraft even after the carrier notified the agency that it had missed a mandatory deadline to complete the work.

The agency has said it would turn the matter over to the Justice Department if the fine were not paid by August 29.

"We just let them know that we would not be paying a fine by the 29th and that we wanted to have additional discussions," said a Southwest spokeswoman.

"It's just another step in this process and we certainly hope to continue those discussions to come up with a fair and reasonable conclusion," the Southwest spokeswoman added.

It is common for airlines to appeal fines, and in many cases the penalty is reduced.

Asked if the FAA still plans to turn the matter over to the Justice Department, an FAA spokesman said: "I really can't speculate on whether that's the course of action we would take."

The FAA spokesman added: "All I can say is that we are continuing to discuss the issue with Southwest this week but really I can't speculate on what the resolution might be."

Southwest met in April with FAA officials as part of an informal review of the fine proposed in March for the alleged maintenance shortcomings.

Southwest has said it did not compromise flight safety, and the FAA said there were no safety incidents related to the missed inspections.

The case was triggered by whistle-blower complaints to Congress, which put pressure on the FAA to step up safety oversight of the industry.